Less than half of West Midlands exporters optimistic for prospects in 2018

Less than half of exporters in the West Midlands are buoyant about their 2018 trade prospects with only two fifths (38%) expecting overseas sales to increase over the next six months, according to a new study.

The latest Business in Britain report from Lloyds Bank said this was on the back of a strong end to 2017 in which a net balance of 40% of firms said their international trade had increased in the second half of the year.

Around 44% of the region’s businesses currently export their goods or services – above the national average of 40% but down from 50% six months ago.

While some are facing new challenges, with 38% of West Midlands exporters deciding to focus more on UK sales in light of Brexit, most are optimistic about what lies ahead.

Tim Hanley, West Midlands and Central England area director for Global Transaction Banking, SME at Lloyds Bank Commercial Banking, said: “The majority of West Midlands exporters still see international trade playing an important role in their plans, despite the continued climate of domestic and international uncertainty.

“Judging from West Midlands firms’ export performances over the previous six months, this confidence is not misplaced and by using international trade as a growth strategy for their business firms in the region can also manage risk during periods of uncertainty.”

The Business in Britain report, now in its 26th year, gathers the views of more than 1,500 UK companies, including 113 in the West Midlands, and tracks a range of performance and confidence measures.

For West Midlands firms as a whole, 32% confirm the biggest barrier to exporting is exchange rate uncertainty, followed by tariffs and quotas (cited by 6%).

A net balance of 8% of all businesses across the West Midlands also say the fall in the value of the pound is bad for the economy, while 15% conclude it’s bad for their business.

Based on their current overseas trading, the current top three most popular partner countries for West Midlands firms are the USA, France and Germany, with 32, 20 and 12% of companies respectively exporting to these countries.

Looking ahead, exporters in the region expect the biggest opportunities for international trade to come from countries outside the EU, with the USA (24%), China (16%) and India (10%) being most popular.